I was at a developer conference earlier this year, and the discussion came around to a certain very popular pattern-matching game. I was surprised by how much hostility I heard. “That thing,” one developer fumed, “is just a slot machine.”

At the time I chalked it up as jealousy. Sure, many mobile games have random elements, but the best ones also require a lot of thought. That’s nothing like a slot machine.

But as I learn more about mobile gaming, I start to see the developer’s point. Most people outside the game industry don’t realize that free-to-play games, by far the most successful mobile game category, are often supported financially by a very small number of users who pay extravagantly for power-ups, extra lives, and in-game currency. The whole point of many successful free-to-play games is to identify these “whales” and extract as much money as possible from them.

The discussion of this process at mobile conferences is sometimes uncomfortable. Non-paying players (the great majority of a game’s users) are often dismissed as meat to be fed to the whales. An intense amount of thought goes into not just identifying the whales, but determining their individual psychology and the best techniques to pull more money from that particular type of person. Players are tracked in as much detail as possible, including exactly which promotion they responded to, what their purchasing pattern is, and any other details the developer can glean from them. Every aspect of the game is crafted to maximize revenue extraction, including minute changes in graphics, button designs, and subtle changes in game play. Anything that creates even a small fraction of one percent change in a conversion rate can mean the difference between a successful and unsuccessful game, so the pressure to constantly refine everything is immense.

At its recent F8 developer conference, Facebook gave a great overview of this process. You can view it here.

At several recent conferences, I’ve heard developers say they’re starting to realize that there seems to be no upper limit on the amount of money you can extract from some users. Do you think offering a bundle of power-ups for $50 is outrageous? Create a bigger offer at $100 and you’ll make even more total revenue.

This process of systematically designing games to extract revenue, and targeting offers at the biggest whales, makes many game developers uncomfortable. In an excellent essay on Gamasutra, Mike Rose wrote, “Free-to-play games aren't after everyone for a few dollars -- they're after weak people in vulnerable states for hundreds, if not thousands.” (link)

Many game developers take issue with that statement. They point out that there’s nothing wrong with accepting money from people as long as they’re in control of their actions. Some people just plain like playing mobile games and are happy to spend money for a better gaming experience. What’s wrong with letting them pay? Besides, if a console gamer buys an Xbox for $300 and a bunch of games worth $700, we wouldn’t call the console industry exploitative. Why should mobile games be any different?

But the discussion at the conferences sometimes sounds a lot like gambling executives trying to talk their way around the problem of compulsive gambling. And sure enough, there are efforts to create an ethical code of conduct for free-to-play game developers, defining how far they can and cannot go to pull money out of a customer (link). You don’t usually get a code of ethics for an industry unless it has a potential ethics problem.

Meanwhile, what’s very clear is that successful free-to-play game development is much more about science than art. I think many game developers were drawn to the field for the art -- they want to create the most engrossing, glorious game experience they can; the game equivalent of a blockbuster movie. I think about the awesomeness that was Marathon and Myst on the Macintosh, or the surreal weirdness of Badland on iOS (link), and that’s the sort of pure mind-bending joy that I want from a mobile game. The idea of systematically altering that experience to extract another purchase from 0.5% of the users feels fundamentally wrong, and probably explains some of the developers’ complaints.

But rather than dismissing their complaints as frustrated idealism, I think it’s a good idea to listen and think about where the industry is going. I think the code of conduct is a very good idea; without it, we could easily end up with government regulation of free-to-play gaming, and I can’t imagine how that could be effective without destroying the category altogether. It would also be a very good idea to develop other new revenue streams to support mobile gaming. That’s why I’m always interested when someone like Facebook claims they can fix mobile advertising. You may not love the idea of mobile games becoming like commercial television, but I think we’d all be a lot more comfortable pushing an occasional ad at every user rather than trying to extract $1,000 from 0.5% of them.

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I'm VP of product marketing at UserTesting. In ten years at Apple, my roles included Director of Worldwide Customer & Competitive Analysis and director of Mac Platform Marketing. At Palm I was Chief Competitive Officer and VP of Product Planning. For more info on me, visit my website. Note: The things I write here are my own opinions and do not represent the views of my employer(s).